This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. Read our privacy policy to learn more.

A development-stage entity devotes substantially all its efforts to
establishing a new business for which planned principal operations
either have not commenced or have not produced significant revenue.

U.S. GAAP currently requires development-stage entities to present
the same basic financial statements according to the same rules as
established operating organizations for recognition and measurement,
startup costs, and other similar costs.

Development-stage entities also currently are required to present
inception-to-date information about income statement line items, cash
flows, and equity transactions. Stakeholders had expressed concern
about the cost and relevance of the additional presentation requirements.

Many development-stage entities do not intend to ever manufacture a
product, but rather sell their research and development to another
business for manufacture. These entities most often exist in the
pharmaceutical, biotechnology, and technology industries, according to
FASB, and they often remain in the development stage for several
years, or even permanently.

Comments on the Proposed ASU, Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements,
are due Dec. 23 and can be made through FASB’s website.

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.